The XM806 lightweight .50 caliber machine gun weighs approximately one-half as much as a similarly configured .50 caliber M2 machine gun, at 70 pounds with tripod. The weapon also reduces the recoil by at least 60 percent. This lighter weight permits easy dismount and ground transportability when necessary, and the reduced recoil permits the mounting of an optic for greater lethality through increased firstburst accuracy and control.

The XM806 can fire all existing the .50 caliber ammunition and is capable of defeating personnel and lightly armored targets out to 2,000 meters. Safety is improved through a manual safety and a quick change barrel that eliminates the requirement for the operator to adjust headspace and timing. The weapon is ideal for light infantry and special operations forces, as well as for vehicles demanding more lethality but lighter weight.

The XM806 was an outgrowth of the effective end of the Advanced Crew Served Weapon (ACSW) program in 2008. As with the .50 caliber XM312 ACSW, the XM806 was intended to be a lightweight, low Recoil, 2-man Portable, vehicle and ground mounted .50 caliber crew served weapon system. The lightweight, low recoil .50 caliber machine gun was intended to be a near term solution. It would fires all existing .50 caliber service ammunition using M9 disintegrating metallic links. It would be 50-60 percent lighter and have 60-75 percent lower recoil than the existing .50 caliber M2 machine gun. The weapon would feature fixed headspace and timing, and a quick change barrel. The barrel change would be able to be performed in less than 15 seconds.

The desired weapon would weight 40 pounds (18 kilograms) maximum, and 62 pound (28 kilograms maximum when on its ground mount. The weapon would be at maximum 8.3 inches wide, 7.3 inches high, and 64.5 inches (uncharged)/56.7 inches (charged) long. The weapon's peak recoil would 325 pounds and shot dispersion would be less than 1.1 mils, one sigma radius. The weapon would be able to provide lethal and suppressive fire out to 2,000 meters, using standard .50 caliber ammunition (M33 ball, M8 and Mk 211 API, and M903 SLAP). The weapon fire from the open bolt position and would feed from a belt using M9 disintegrating metallic link (compatible with M2 feed system) from the left, ejecting cases and links to the right. The cyclic rate of fire would be 265 shots per minute or 40 shots per minute sustained, with barrel cooling or replacement after 400 rounds. The weapon would have a mean rounds between failure of 6,000 (threshold)/10,000 (objective). The weapon would be operationally insensitive to environmental conditions.

An early user assessment for US Special Operations Command was completed on 9 May 2008. During the assessment, 2 prototype weapons fired 10,000 rounds over 3 days.

Also during May 2008, a contract was awarded to General Dynamics Armament And Technical Products, the lead contractor in the ACSW program, to complete objective weapon design and build 3 weapons. General Dynamics Armament and Technical Products announced the contract, awarded by the US Army Joint Munition and Lethality Life Cycle Management Command, on 14 May 2008. The $9 million contract would fund development of the gun and system components such as the tripod, vehicle adapter assembly and blank firing adapter. Production and fabrication work would be performed at the General Dynamics Armament and Technical Products facility in Saco, Maine, with development work performed at the company's technology center in Burlington, Vermont.

By late 2008, the lightweight .50 caliber machine gun was still in the early stages of system design and development and officials at the Program Executive Office Soldier at Fort Belvoir said they expected the weapon to be fielded in 2011. In March 2009, the weapon was designated as the XM806. The weapon would be ground deployable with a newly developed pintle with traverse and elevation mechanism and tripod. It would be vehicle mountable using the existing Mk 93 and Mk 64 series mounts when equipped with a newly designed cradle. The weapon would be capable of firing M1A2 .50 caliber blank ammunition when the standard barrel was replaced with a newly designed blank firing adapter.

By May 2009, the XM806 machine gun was expected to weight, with its tripod 64 pounds, half of what the M2 .50 caliber heavy machine gun weighed. The weapon would be more accurate and quicker to reach its target because it would also have 60 percent less recoil than the .50 caliber M2 machine gun. The XM806 machine gun could also be fitted with a modified M145 machine gun optic for greater accuracy at range. The Army was working on the XM806 machine gun to augment work on improvements to the existing .50 caliber machine gun, which eventually resulted in the the M2A1.

As of May 2010, the XM806 was undergoing testing for future fielding. It was designed to augment the .50 caliber M2 machine gun, but could also be used to replace the M2 in select operational locations. The requirement was to eventually reduce the weapon's weight to 65 pounds.